Financial Data and Key Metrics Changes - In Q1 2025, adjusted earnings per share were 58 cents, with core pre-tax income of $247 million and adjusted net revenue of $2.1 billion, reflecting solid execution across core businesses [14][15] - Net interest margin for the quarter was 3.35%, up two basis points compared to the previous quarter [14][36] - The company reported a GAAP loss per share of 82 cents for the quarter, primarily due to a pre-tax loss related to securities repositioning [35] Business Line Data and Key Metrics Changes - In the auto finance business, consumer originations reached $10.2 billion, driven by 3.8 million applications, the highest quarterly application volume ever [19] - Insurance written premiums were $385 million, representing a 9% year-over-year increase, with the average number of insurance products sold per dealer increasing to 2.2% [21][22] - Corporate finance delivered pre-tax income of $76 million with a 25% return on equity, maintaining zero net charge-offs [23][24] Market Data and Key Metrics Changes - The digital bank served 3.3 million customers with balances reaching $146 billion, up nearly $3 billion quarter-over-quarter [26] - The company expects tax payments to result in lower deposits in Q2, aiming for approximately flat balances for the full year [27] Company Strategy and Development Direction - The company is focused on simplifying its organization and prioritizing resources in areas with demonstrated competitive advantage, including dealer financial services, corporate finance, and deposits [12] - A multi-year partnership with the WNBA was announced, reinforcing the company's commitment to brand strength and community engagement [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong position despite macroeconomic uncertainties, emphasizing the importance of focus and strategic execution [13][73] - The company anticipates some near-term volatility due to changes in trade policy but remains optimistic about long-term economic benefits [73] Other Important Information - The transfer of the credit card business to held for sale was completed, which is expected to strengthen the balance sheet [16][17] - The company has taken steps to manage interest rate risk and improve net interest income through strategic repositioning of its securities portfolio [42][43] Q&A Session Summary Question: How do tariffs impact the business? - Management acknowledged the evolving uncertainty regarding tariffs but emphasized the company's strong balance sheet and strategic positioning to navigate the environment [82][84] Question: Can you discuss the NIM outlook? - Management reiterated guidance of 3.4% to 3.5% for 2025, considering various rate scenarios and emphasizing resilience in the business model [92][93] Question: What is the outlook for credit performance? - Management indicated that while there are positive trends in delinquency and flow-to-loss rates, caution is warranted due to macroeconomic uncertainties [116] Question: What is the used car price outlook? - Management noted that used car prices are expected to remain elevated, potentially benefiting the business, but emphasized the uncertainty surrounding future price movements [126][127]

Financial Data and Key Metrics Changes - Operating earnings per share increased to 52 cents, a four cent increase from the previous quarter, indicating positive operating leverage and a strong balance sheet [11] - The quarterly operating efficiency ratio improved to 56.7%, operating return on assets rose to 1.25%, and operating return on average tangible common equity grew to 15.95% [11] - Tangible book value per share increased by 13.8% on an annualized basis [12] Business Line Data and Key Metrics Changes - Customer deposit growth was solid, with total deposits increasing by $200 million or 3%, driven by strong growth in interest-bearing money market products [21] - Total loans declined by $182 million during the quarter, influenced by strategic portfolio management actions [22] - Commercial mortgage and residential mortgage loans showed growth, offsetting some declines in other areas [22] Market Data and Key Metrics Changes - Non-interest income for the quarter was $67.2 million, with fee income as a percentage of revenue at 21% [26] - The average cost of total deposits decreased by 11 basis points to 2.03% [25] Company Strategy and Development Direction - The company continues to execute its strategic transformation through the implementation of Fulton First, focusing on talent alignment, reinvestment for growth, and operational simplification [13] - Loan growth is expected to be in the low single-digit range for the year due to strategic decisions and the current environment [17] Management's Comments on Operating Environment and Future Outlook - Management remains cautious regarding credit quality as customers navigate a volatile environment, despite improvements in asset quality metrics [18] - The company updated its rate forecast to include four 25 basis point cuts in 2025, which may impact net interest income and non-interest income [32] Other Important Information - The allowance for credit losses to total loans ratio increased to 159%, and the allowance for credit losses to non-performing loans coverage increased to 193% [30] - The company expects to incur up to $14 million of additional non-operating expenses related to Fulton First for the remainder of 2025 [29] Q&A Session Summary Question: Can you talk about loan growth and strategic offsets? - Management noted that overall pipelines increased year over year, but they remain cautious about the pull-through rate due to macro uncertainty [38] Question: What is the impact of potential rate cuts on net interest income? - A 25 basis point cut would be a headwind of about $1.7 million annually [44] Question: How is the credit portfolio being managed in light of tariffs? - Management is closely monitoring the credit portfolio for potential impacts from tariffs and government cost-cutting, particularly in the agricultural and manufacturing sectors [50][54] Question: What is the company's stance on share buybacks? - The capital strategy prioritizes organic growth and corporate initiatives before considering buybacks, although some shares were purchased in the first quarter [66] Question: How flexible is the operating expense guidance? - There is potential flexibility in timing for operating expenses, but management is comfortable with the midpoint of the expense range for now [73] Question: What is the outlook for fee income given market sensitivity? - Fee income growth has been strong, but headwinds are anticipated due to market sensitivity and interest rate volatility [78]